Cognizanti

An annual journal produced by Cognizant

VOLUME 8 ISSUE 1 2015

Part II

Digital
Business
2020:
Getting there
from here!
Talent Augmentation
Through Intelligent Process
Automation, Smart Robots Extend
the Capabilities and Creativity
of Smart Humans

Cognizanti is an annual journal published by Cognizant. Our

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Talent Augmentation

Through Intelligent Process

Automation, Smart Robots
Extend the Capabilities and
Creativity of Smart Humans
By Robert Hoyle Brown

Process automation is
moving from the factory floor
to the world of knowledge
work, but robots cant do
it alone they need smart
people to ask good questions,
solve problems creatively,
connect to people and
manage data. Companies that
calibrate smart hands with
smart machines are already
achieving higher productivity
and superior business results.
From The Six Million Dollar Man to Aliens
to Iron Man, pop culture has consistently
adhered to the sci-fi motif of robotics augmenting human grit, creativity, determination, decision-making, adaptability and the
will to succeed. But the fictional counternarrative exists in the popular imagination
as well, with humans and robots also depicted
as fierce adversaries, waging a battle for
superiority.

In reality, there are strong arguments for both

sides. In a 2014 Pew Research Center study,
technology experts were evenly divided as to
whether robotic devices and a less tangible
form of robots networked and automated
artificial intelligence (AI) applications will
displace more jobs than they create by 2025.1
The truth, as usual, is in the middle. We now
see a new and important type of robotics
emerging that we call intelligent process
automation (IPA). With IPA, smart machines
augment and extend peoples uniquely human
capabilities empathy, creativity, problemsolving and drive to deliver superior business
results built on AI and machine learning.
Of course, the most common robots are
the ones that make cars, unload ships,
assemble products or vacuum floors. But
we are now entering a new era of humanmachine interface for repetitive and rote
processes. Increasingly astute software tools
have emerged as the robots for knowledge
work. Humans are now working smarter with
sophisticated software to automate business
tasks. More importantly, these process
systems are generating rich data that drives
meaningful insights, value and business
outcomes. And according to our recent
research, IPA is contributing at least 10% to
the revenue growth of early adopters.2

Cognizanti 4

Going Beyond Swivel

Chair Workarounds

Process Automation
Pays Dividends

While virtually every existing business

process uses technology, theres still a lot
of repetitive, manual data entry, searching
and collating that happens to get things
done. Many process steps havent been
automated by core systems, while others
rely on workarounds that require workers to
toggle between multiple systems and screens
to achieve last-mile integration of data. The
value of this type of swivel-chair work
can be pretty limited; if these tasks were
automated, costs would decline, while speed
and accuracy would rise. It would also mean
that the people essential to the process could
do more in less time.

To get a deeper understanding of how far,

how fast IPA developments will play out, we
recently surveyed 537 organizations in North
America and Europe.3 Our study reveals
that process automation is fast becoming a
force-multiplier to knowledge workers in the
banking, healthcare and insurance industries.
Key findings include:
OO

In addition to collectively adding costs,

sometimes these unautomated tasks can
inject risk. For example, in insurance,
the cost of miscoding on claims adds up
to millions per year, not to mention the
decline in client satisfaction resulting from
multiple claims. It doesnt have to be that
difficult; with automation applied, insurers
can achieve 80% first-pass accuracy through
auto-adjudication, and adding the technologies of IPA can raise that to as high as 99%
in our estimation.
These outcomes are welcome. But the true
intelligence value of digitization through
IPA lies in the rich data and metadata that
accumulates around process value chains.
When real-time insights are gleaned from
that data and fed back into the process
through analytics, artificial intelligence
and machine learning real transformation
can begin as smart people can explore data,
discover patterns and recommend appropriate actions. Take the insurer that automates
its claims management process and then uses
the data from its daily audit logs to detect
hidden fraud patterns that could never be
discovered manually.
When it comes to knowledge work, robots
wont dominate humans but, rather, will
work in tandem to make smart humans
smarter and businesses more agile.

Process automation is saving substantial amounts of money, today.

Automation is currently empowering
businesses to work smarter, and reduce
the number of people involved with the
process; nearly one-fifth of respondents
achieved greater than 15% cost savings
through automation in the past year
(see Figure 1, next page).
For some perspective, a decade ago the
non-interest operating expense of all
federally-insured banks was about $275
billion.4 If the findings in our survey were
applied, this expense could be reduced by
15%. Thats a stunning savings of about
$40 billion. Executives predict that the
number of people directly tasked with
performing process delivery will decrease
significantly in the coming years.

OO

OO

The data generated by automation will

radically improve process outcomes.
A far more profound benefit than cost efficiency lies in the process data and metadata
generated by automation. Roughly 50%
of respondents see automation (and 44%
see analytics) as significantly improving
processes over the next three to five years.
Digital value chains can reform datarich processes. One-third of respondents
cite the direct improvement of data quality,
consistency and believability of data to
perform better analytics as an outcome of
their digital initiatives. In other words, you
have to digitize to analyze. Thats where
merely adding a robot or automating
an existing process falls short. Prompted
by innovative competitors, a full digital
re-think may be crucial to transform core
processes in the future of work. By using
next-generation technologies based on
social, mobile, analytics and the cloud (the

Robots Enable a Money-Saving Assembly Line

Percent of decision-makers who expect to realize at least 15% cost savings
across front-office, middle-office and back-office functions as a result of
automation over the next three to five years.
HORIZONTAL PROCESSES

34%

Customer
management
& sales

39%
Human
resources

36%

New product/
service
development

INDUSTRY-SPECIFIC PROCESSES
Front-office and customer-facing functions

55%

Middle-office or operational functions

40%

Back-office or support functions

43%

New business, underwriting &

customer service

39%

Policy service and contract administration

46%

40%

Finance &
accounting

40%

Supply chain

Claims administration

53%

Risk, fraud & compliance

49%

Enrollment & billing services

50%

Claims coding & processing

41%

Overpayment recovery services

39%

Fraud & abuse services

39%

Medical management

40

Member/provider customer support

BANKS

PC&L
INSURERS

HEALTHCARE
PAYERS

47%

Source: Cognizant Center for the Future of Work

Response base: Healthcare payers: 102; PC&L Insurers: 115; Banks: 153
Figure 1

SMAC Stack), companies are completely

re-imagining customer, supplier and partner
interactions. And by igniting the digital
information surrounding these entities
or Code Halo organizations can realize
business process insights in far greater fidelity than has ever been possible before.5
Clearly, many companies are already moving
in this direction, but much more can be done.
Getting there will require business leaders
and decision-makers to quickly seize IPAs
vast potential. For example, while respondents report that a large percentage of their
processes are currently automated (25% to
40%, in most cases), the expected increase in
process automation over the next five years
seems low (10% to 20%). It could be that
what a lot of leaders currently regard as automation is driven by core IT investments
(i.e., ERP, CRM, BPM and other enterprise
applications). While all of these can foster
automation, they will not help organizations
reach the level that IPA can.

Data Generated from

Automation Will
Substantially Improve
Process Outcomes
Interestingly, most respondents remain
focused on how IPA can streamline and
optimize processes rather than rethinking
process work (see Figure 2, next page).
However, the data generated by the
increasingly astute technologies of process
automation and digitization is the real prize,
for businesses and workers alike. Solely
applying robotic automation to an as-is
process can fall short of the true competitive differentiation many organizations could
achieve through process digitization.
Thats why when it comes to IPA, organizations need to cast a wider net. The reason:
Automation opportunities are emerging at
warp speed as the physical and digital worlds

Cognizanti 6

at their jobs. In the words of Aaron Levie,

the co-founder and CEO of Box: Adding
software to a broken process doesnt make
you digital. The biggest challenge is reimagining the process, not writing the software.6

blend as one. It seems as though nearly every

physical process is instrumented with sensors,
telematics and things that drive ever-growing feedback loops of data. With advances in
machine learning, artificial intelligence and
big data, companies enhance their ability to
predict rather than react to rapidly changing
demands and expectations. Examples include
real-time dynamic fleet optimization for
destination and delivery capacity for logistics;
analysis of driving behavior for dynamic
auto insurance policy pricing; and collation
of huge volumes of clinical data to optimize
pharmaceutical trials.

Respondents who are applying analytics

to processes in the customer-facing and
front-office realms are realizing at least 10%
revenue growth from doing so (see Figure 3,
next page). Additionally, one-third (32%) of
respondents were well aware of the analytics
value of digitized processes, citing improved
quality, consistency and believability of the
data theyre getting from digital process
initiatives; nearly a third (28%) said process
digitization led to easier data integration
across processes.

Businesses that are already embracing

these new technologies are capturing more
data, improving processes and generally
empowering workers to be more effective

Process Analytics: Show Me the Meaning (Making)

Percent of
decision-makers
citing the current
use of analytics
for the following
outcomes

Optimizing
product portfolio

Creating new
products/services

28

23

Reducing
costs
Understanding
customer
requirements

Enhancing
process accuracy
Better market
penetration &
segmentation

Prioritizing
business needs
Streamlining
processes

Source: Cognizant Center for the Future of Work

Response base: 537
Figure 2

43%
Better process
throughput
& quality

Ramping up Analytics to Ramp up Revenue

Percent of respondents realizing/anticipating at least 10% of
revenue growth achieved as a result of data analytics within the
following selected industry-specific processes.

Member/provider
customer support

42%

Claims coding
& processing

38%

New business,
underwriting &
customer service

36%

8%

13%

25%

13%

8%

HEALTHCARE
PAYERS

FROM ONE
YEAR AGO

EXPECTED
IN 1-2 YEARS

3-5
YEARS

17%
PC&L
INSURERS

Front office &

customer-facing
functions

45%

13%

15%
BANKS

Source: Cognizant Center for the Future of Work

Response base: Healthcare payers: 102; PC&L Insurers: 115; Banks: 153
Figure 3

Getting Started with IPA

OO

Organizations must act swiftly to close

the gap between where they are now with
automation and where they hope to be over
the coming years. Here are a few pointers to
get started:
OO

Perform an automation readiness

assessment. Make a detailed map of your
existing processes (new product/service
development, sales and customer relationship management, operations, etc.).
Scan the market for minimally invasive
automation technologies that would
produce efficiency gains, while remaining
receptive to new differentiating transformation. Some simple questions to ask
prior to a process readiness assessment
include: How do I get rid of paper-based
process inputs, such as invoices or claims,
and get my process truly digital from the
outset? Do the people delivering my
processes today add value or inject risk?
What are we learning about our business
or industry value chain as data is analyzed,
and does it help smart people to make
better decisions?

OO

Help humans evolve toward the work

of tomorrow. Give employees access to
digital processes and machines that help
them do their jobs better, smarter and
with more meaningful business impact.
Build your processes for humans, and
use IPA to catalyze productivity, not as
a wholesale worker replacement. After
all, in business, its not about the number
of people tied to doing the process; its
about outcomes and helping your smart
people work even smarter.
Assign tiger/SWAT teams, including
a mini-CIO. There are likely many
extremely valuable (and digitally-savvy)
resources that would jump at the chance
to become automation experts or join
an IPA tiger team. Were also starting to
see more references to chief automation
officers. Rather than ask what can be
automated, forward-thinking practitioners will instead ask what needs to
stay human, taking the starting point
that everything, theoretically, can be
automated. Physically co-locate these IPA
change agents in the operational delivery
arms of your business units. Keep them

Cognizanti 8

The human spark is, and will remain, essential

to how knowledge work is orchestrated
and managed.
thinking not just about IPA, but also
about the new process anatomy, data and
the art of the possible, including participatory design/research principles.
OO

Execute specific process projects to

learn fast, or fail fast. Be specific
dont place resources and hope for the
best. IT resources landing in a business
unit without work assignments are often
quickly marginalized and abandoned.
Identify, develop and implement solutions
for process automation or digital business
transformation fast to successfully
outrun the competition.

IPA is here today its quickly accelerating and disrupting the status quo. It sets
the scene for smart automation, built and
operated by smart people freed from the
humdrum who can focus on creating greater
business value.
Understanding the symbiotic relationship
between humans and robots is crucial to
understanding what the future holds. After
all, the human spark is, and will remain,
essential to how knowledge work is orchestrated and managed. Whats different is that
technologies can now create more effective
knowledge workers while simultaneously
generating and capturing data that can
improve and even transform processes, along
with eliminating wasteful steps.
Despite a flood of hysteria about cyborg terminators, organizations shouldnt be worried.
Rather, they should embrace IPAs immense
savings and revenue growth opportunities because like the latest sci-fi movie, its
coming soon to a process near you.

Survey Methodology
Online panel-based research was conducted
with decision-makers from banking and financial
services, insurance and healthcare companies
across North America and Europe. The sample
also included companies from the pharmaceuticals, retail, hospitality and technology industries.
The research was gathered from 537 respondents, representing companies with $500 million
to $3 billion in revenue. The research instrument
was fielded by an independent research agency
(E2E Research) on behalf of Cognizant.
This article which expands on themes explored
in Why Smart Hands and Machines Will
Power the Second Industrial Age (by Robert
H. Brown, Cognizanti, Vol 7, Issue 1, 2014)
was adapted from the white paper The Robot
and I: How New Digital Technologies Are
Making Smart People and Businesses Smarter by
Automating Rote Work, Cognizant Technology
Solutions, January 2015, http://www.cognizant.
com/InsightsWhitepapers/the-robot-and-I-hownew-digital-technologies-are-making-smart-people-and-businesses-smarter-codex1193.pdf.
Note: Code HaloTM is a trademark of Cognizant
Technology Solutions.

Footnotes
1

In the Pew Research survey, 48% of respondents said robots and digital agents would displace
significant numbers of both blue- and white-collar workers by 2025, with many expressing
concern about the resulting income inequality, mass unemployability, and breakdowns in
the social order. Meanwhile, 52% said that while many jobs currently performed by humans
will be substantially taken over by robots or digital agents by 2025, they have faith that
human ingenuity will create new jobs and industries, just as it has done since the dawn of the
Industrial Revolution. For more on the study, see AI, Robotics and the Future of Jobs, Pew
Research Center, Aug. 6, 2014, http://www.pewinternet.org/2014/08/06/future-of-jobs/.

The Robot and I: How New Digital Technologies Are Making Smart People and Businesses
Smarter by Automating Rote Work, Cognizant Technology Solutions, January 2015,
http://www.cognizant.com/InsightsWhitepapers/the-robot-and-I-how-new-digital-technologies-are-making-smart-people-and-businesses-smarter-codex1193.pdf.

Ibid.

Measuring Bank Performance, http://wps.aw.com/wps/media/objects/3000/3072002/

appendixes/ch09apx2.pdf.

Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of
Business, by Malcolm Frank, Paul Roehrig and Ben Pring, published by John Wiley & Sons,
April 2014, www.wiley.com/WileyCDA/WileyTitle/productCd-1118862074.html.

https://twitter.com/levie/status/599045909825982464.

Author
Robert Hoyle Brown is an Associate Vice-President in Cognizants Center for the Future of Work and drives
strategy and market outreach for Cognizants Business Process Services business unit. He is also a regular
contributor to the blog www.Futureofwork.com. Prior to joining Cognizant, he was Managing Vice-President
of the Business and Applications Services team at Gartner, and as a research analyst, he was a recognized
subject matter expert in BPO, cloud services/BPaaS and HR services. He also held roles at Hewlett-Packard
and G2 Research, a boutique outsourcing research firm in Silicon Valley. He holds a bachelors degree from the
University of California at Berkeley and, prior to his graduation, attended the London School of Economics as
a Hansard Scholar. He can be reached at Robert.H.Brown@cognizant.com.

Cognizanti 10

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology,
consulting, and business process outsourcing services, dedicated to helping
the worlds leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a
global, collaborative workforce that embodies the future of work.
To learn more about Cognizant, please visit: www.cognizant.com.

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